Canadian Housing Starts Increased in August

(Photo Credit: CMHC)

CANADA - The trend in housing starts was 219,447 units in August 2017, compared to 217,339 units in July 2017, according to the Canada Mortgage and Housing Corporation (CMHC). This trend measure is a six­month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts.

Monthly highlights:

Regina

Total housing starts trended higher in August after local homebuilders increased production of multi­family units. After eight months this year, new home construction in Regina is continuing at a much more robust pace than in the same period of 2016. Declining new home inventory and signs of a strengthening labour market have generated more optimism among local homebuilders and pushed production higher in both the single and multiple sectors. As a result, actual year­to­date total starts were up 37 per cent in August at 1,420 units, compared to 1,039 a year earlier.

Vancouver

The trend measure for housing starts in the Vancouver CMA held steady in August. The pace of new home construction continues to be well above the historical average, as developers have been focussed on densifying more affordable suburban markets through the construction of multi­family dwellings. Demand for new housing is being supported by employment gains, migration and relatively low mortgage rates.

Kelowna

The trend measure for housing starts in the Kelowna CMA moved upward significantly in August as multi­unit housing starts, particularly starts of rental apartments got underway. So far in 2017, there have been a total of 1,366 rental units that were started, which is the most in any eight month period in Kelowna’s history. These new rental units will contribute needed supply to the market as the apartment vacancy rate in Kelowna has remained below one percent for the past two years.

CMHC uses the trend measure as a complement to the monthly SAAR of housing starts to account for considerable swings in monthly estimates and obtain a more complete picture of Canada’s housing market. In some situations analyzing only SAAR data can be misleading, as they are largely driven by the multi­unit segment of the market which can vary significantly from one month to the next.

The standalone monthly SAAR of housing starts for all areas in Canada was 223,232 units in August, up from 221,974 units in July. The SAAR of urban starts increased by 0.8 per cent in August to 207,524 units. Multiple urban starts increased by 2.7 per cent to 145,618 units in August. This masks a lot of volatility in provincial multiple starts. Single­detached urban starts decreased by 3.2 per cent, to 61,906 units.

Rural starts were estimated at a seasonally adjusted annual rate of 15,708 units.